Ideas for Retirement

Yesterday Ben and I did a show on retirement. How to think about it, how to plan for it, and everything in-between. We got some great feedback and ideas that I thought were worth sharing.

Saving for college

We put all of our kids through college with a fairly simple, but rigorous plan. We would pay for up to a state school education or if they received scholarships to a private one that makes it similar in cost. Our children were ‘required’ to work during the summers and in school to contribute about $1,500/year so they had skin in the game.  We basically partnered with them and were fully transparent with the numbers. My wife and I loosely saved about one year of tuition for each…One extra thought – we offer 0% financing to our kids to get their masters degrees – so far 2 have done that.

Teaching your kids about compound interest

Open a Roth IRA for your kids.  Once they earn their first taxable income you impose a “Dad Tax” and extract a small amount, and then demonstrate your love by funding  it to the maximum allowable with “Dad Dollars”.  Then teach them the Rule of 72 and the concept of delayed gratification.  While the math of the former is easy, and the  implementation of the latter takes a stick, even my two smart ass millennial offspring will now admit it created a solid foundation.

Don’t wait to travel

I thought your advice to your audience (which seems like it is mostly your age and younger) was excellent. The only thing I think is important to add is that if you think you will wait to travel until retirement…..don’t. Travel as much and as often as you can your entire life…I realize that it’s easier to say if you don’t have kids…..but you will not want to take trips in your late sixties and seventies ( or eighties) that you would take when you are younger.

Somebody also shared a few tools that parents can help teach their kids about money.

Greenlight

GoHenry

Retirement can sometimes feel like this amorphous concept, but just because we can’t touch it or see it, doesn’t mean we can pretend it’s not real. We should have a sense of urgency about retirement because it’s coming, and there are no do overs.

The best time to start saving was as soon as you got your first paycheck. The second best time is now. Don’t delay.

 

 

 

 

 

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